Correlation Between GeoVax Labs and PepGen

Can any of the company-specific risk be diversified away by investing in both GeoVax Labs and PepGen at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining GeoVax Labs and PepGen into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GeoVax Labs and PepGen, you can compare the effects of market volatilities on GeoVax Labs and PepGen and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in GeoVax Labs with a short position of PepGen. Check out your portfolio center. Please also check ongoing floating volatility patterns of GeoVax Labs and PepGen.

Diversification Opportunities for GeoVax Labs and PepGen

-0.53

Correlation Coefficient

GeoVax Labs  PepGen

Excellent diversification

The 3 months correlation between GeoVax and PepGen is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding GeoVax Labs and PepGen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PepGen and GeoVax Labs is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on GeoVax Labs are associated (or correlated) with PepGen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PepGen has no effect on the direction of GeoVax Labs i.e., GeoVax Labs and PepGen go up and down completely randomly.

Pair Corralation between GeoVax Labs and PepGen

Given the investment horizon of 90 days GeoVax Labs is expected to generate 1.7 times more return on investment than PepGen. However, GeoVax Labs is 1.7 times more volatile than PepGen. It trades about 0.04 of its potential returns per unit of risk. PepGen is currently generating about -0.18 per unit of risk. If you would invest  241.00  in GeoVax Labs on September 29, 2024 and sell it today you would earn a total of  5.00  from holding GeoVax Labs or generate 2.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

GeoVax Labs  vs.  PepGen

GeoVax Labs

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GeoVax Labs are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, GeoVax Labs showed solid returns over the last few months and may actually be approaching a breakup point.

PepGen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PepGen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with GeoVax Labs and PepGen

The main advantage of trading using opposite GeoVax Labs and PepGen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GeoVax Labs position performs unexpectedly, PepGen can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in PepGen will offset losses from the drop in PepGen's long position.

The idea behind GeoVax Labs and PepGen pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.